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Goldman Sachs launches online bank for the masses
[NEW YORK] Goldman Sachs has officially launched an online bank aimed at households and small businesses as it expands from its Wall Street base and aims for the masses.
The online-only GS Bank permits consumers to open an account for as little as US$1, a big shift for a financial powerhouse that has built itself around serving billionaires and giant companies undertaking mega-mergers.
The move comes on the heels of Goldman's acquisition of GE Capital's online deposit platform, after which it assumed about US$16 billion of deposits from some 145,000 customers.
"Welcome to Peace-of-Mind Savings," reads the bank's pitch to consumers who desire federally insured savings accounts.
Goldman is offering savers a relatively robust interest rate of 1.05 per cent, much higher than the 0.01 per cent now available at JPMorgan Chase and other retail banks.
Goldman is also offering a five-year certificate of deposit at 2.0 per cent, also much higher than the going rates at other large banks.
Goldman has no plans to open retail branches at a time when JPMorgan and other large banks have been trimming costs by cutting back on their retail presence.
Goldman's purchase of the GE Capital assets was approved in March by the US Federal Reserve, which has welcomed the move into the mass market as a way to diversify Goldman's business.